With borrowing last year still running at 6.6pc of UK output, George Osborne
still faces a tough task to fix the public finances

One hundred million pounds may sound like a lot of money, but for George Osborne, who is currently dealing with a budget deficit of more than £100bn, it’s a drop in the ocean.

It was by this margin that the Government managed to limbo under its public borrowing target set by the Office for Budget Responsibility – the Government’s independent fiscal watchdog – in the March Budget.

The good news is that unlike the 2012-13 financial year, when Robert Chote, the head of the OBR, noted that the Treasury only managed to meet its borrowing target because it “shoved forward” £18.5bn of departmental spending into the next financial year, this year’s improvement has been driven by a 4.3pc increase in tax and income receipts, while income from stamp duty has soared.

Spending is constrained, and will probably remain so in the coming years if the Chancellor is to meet his ambition of achieving a surplus in 2018-19.

Britain’s decision to adopt new accounting standards will also complicate matters. Network Rail will be reclassified as a government body, instantly adding £140bn to Britain’s debt pile, which already stands at close to £1.2 trillion, and more than £3bn to public borrowing this year.

Bringing Britain’s national accounts in line with global accounting standards will also rewrite economic history when introduced in September.

For example, spending on research and development will count towards gross domestic product rather than be treated as a cost of production. This is expected to boost the size of Britain’s economy by between £40bn and £75bn.

But while the Chancellor remains on track to eliminate the deficit, the enormity of the task ahead must not be underestimated.

By the end of this financial year, almost half of the Government’s deficit reduction plan will have been implemented.

But with borrowing last year still running at 6.6pc of UK output, Mr Osborne still faces a tough task to fix the public finances. As one economist put it yesterday: austerity won’t be going away anytime soon.

Primark steps into the American unknown

Crossing the Atlantic has been easier for certain teenage pop bands, comedians and actors then it has been for British retailers.

So, while One Direction may have found success in the US, Tesco, Sainsbury’s and Marks & Spencer have all floundered.

Primark has been one of the most successful retailers in the UK over the past decade, but the US is a completely different challenge.

Tesco was at the peak of its powers under Sir Terry Leahy when it tried to crack the US, but it ended up writing off more than £1bn and walking away from loss-making stores.

Primark insists it has conducted “extensive research” about entering the US. However, so did Tesco – its executives lived with American families and a mock store was set up.

The problem for Primark is that it is not renowned as a distinct fashion brand in the same way as Burberry, Ted Baker and Topshop, which have been successful in the US.

George Weston, the boss of Primark’s parent company, Associated British Foods, pointed to H&M, Zara, and Uniqlo as international clothing chains that have prospered stateside.

However, these companies still have a clear identity and unique fashions.

Primark, first and foremost, is renowned for its low prices. Will that alone be enough to attract US shoppers?

So far, the retailer has succeeded across Europe, including in Germany and Spain. The early signs are that it is also performing well in France.

Over the past two years, there has been a noticeable improvement in the fashion credentials of Primark clothing, so that will help the retailer in the US.

It is also undeniable that low prices are a powerful draw for shoppers. UK consumers are still shopping at Primark despite its connection to the collapse of a factory in Bangladesh.

However, the US is a step into the unknown, even for Primark. The middle class in the US approach discount retailing in a different way and Kmart and Sears will be tough competitors.

At least if Primark’s foray does not work it will not cost the earth. The initial costs are estimated at just £1m to £2m.

North could mirror US prosperity from fracking

Fracking is having a profound effect on the US economy, but nowhere is this more apparent than in Canton in the state of Ohio.

The city is well known among Americans as the home of the Hall of Fame for the greatest players in the National Football League (NFL). Over a century ago the Canton Bulldogs American football team helped to pave the way for the eventual formation of the NFL and the modern spectacle of heavily padded giants slamming into each other at great speed.

However, Canton’s mayor has another idea about how this quiet corner of Ohio should market itself to the world and is said to favour a rebranding of the city as the “Utica Capital” of America. This is in reference to the Utica shale formation – a massive subterranean slab of rich gas-infused rock that stretches across much of Pennsylvania, West Virginia and Ohio. The development of the adjoining Marcellus shale formation has already unlocked vast quantities of natural gas. Utica is expected to be just as bountiful.

For Ohio and cities such as Canton and nearby Youngstown, shale gas has helped revive the economy.

Farmers have grown rich from the sale of drilling rights and local communities have benefited on both sides of the state line as industries have grown to serve the shale gas revolution. In Youngstown, a former steelmaking city, there is even a shortage of school bus drivers because of demand to fill highly paid lorry driving jobs in the shale industry.

A new report published on Thursday by EY for UK Onshore Operators Group has strongly hinted that a similar transformation in parts of Britain could happen if shale gas fracking is embraced. It identifies a potential £33bn of investment that could be linked to shale drilling, with most of the benefits centred on the industrial north of England and regions that are among the most deprived.

If the valid concerns of local communities over the environmental impact are addressed and the industry is properly regulated, as in the US, then fracking could help bring prosperity to parts of northern England just as it has in Canton.